Hargreaves Landsdown Question

cloud_dog

NorthernGeezer wrote: »

I could live with a £25 closure fee.
Fidelity charge 0.25% for holding cash in a SIPP, which works out at a tidy sum when u consider they are doing naff all.

I'm unsure if this is correct.

The OH has been with Fidelity SIPP for 6 weeks (transferred from HL), and the account hasn't been deducted any charges as yet. The account is currently sat 100% in cash and we have received an interest payment so, I would think (although needs confirming) that if they have processed the 'What should we pay the account' they may have also processed the 'What does the account owe us'. I am assuming they process charges etc on a monthly basis (but haven't been with them long enough to confirm).

Their account charges page lists their charging structure based on "Total value of investments". I'm sure you could argue either way and that cash falls under the category of being included or excluded from their charging structure.

Perhaps someone else who has been with Fidelity for a longer period may be able to confirm. I'll PM them but they may take a few days to respond.

NorthernGeezer_2

I spoke to Fidelity yesterday who informed me that if I leave my money as a cash fund it will be charged an annual management fee of 0.25%.

NorthernGeezer_2

Correction....................."Administration Charge"

OldMusicGuy

NorthernGeezer wrote: »

The general feeling here seems to be dont invest for the short term (5 years),
My pension pot is only £90k which will reduce immidiatley to 67.5K when i take my 25% tax free.
I will then be withdrawing around £12.5k a year for 4 years till my state pension kicks in which will leave me around £17k in the pot.
Not a lot to invest, i'm very risk averse and i cant see the pot increasing much over the 5 year period when i have to pay charges, hence my thought about using the HL facility like a bank.

Like you, I am very risk averse. I am holding a six figure sum in cash in my HL SIPP right now. I plan to use this for UPFLS over the next five years until SP. Inflation is irrelevant to me over that period and I have locked in significant "profits" in terms of both investment growth and significant tax relief. I still have over 3 times this amount invested for the long term, but I feel more comfortable having gains over the last few years locked in as cash to spend as I decumulate. And to your original point, HL does allow this at no cost.

Bravepants

This is exactly what I'm planning to do with my SIPP. I plan to retire in 5 years time and I want to take as little risk with that pot as I can. In the meantime I am still contributing to a 70/30 equity/bond split ISA, and buying added pension.

NorthernGeezer_2

I'm of the same mind, not really bothered about inflation, more concerned about the potential losses and charges.

Bravepants

Also, general advice is to have a cash buffer incase of downturn. There is no rule of thumb that says that cash buffer can't be in a pension.

MonroeM

cloud_dog wrote: »

I'm unsure if this is correct.

The OH has been with Fidelity SIPP for 6 weeks (transferred from HL), and the account hasn't been deducted any charges as yet. The account is currently sat 100% in cash and we have received an interest payment so, I would think (although needs confirming) that if they have processed the 'What should we pay the account' they may have also processed the 'What does the account owe us'. I am assuming they process charges etc on a monthly basis (but haven't been with them long enough to confirm).

Their account charges page lists their charging structure based on "Total value of investments". I'm sure you could argue either way and that cash falls under the category of being included or excluded from their charging structure.

Perhaps someone else who has been with Fidelity for a longer period may be able to confirm. I'll PM them but they may take a few days to respond.

In their SIPP information leaflet it says it pays interest on cash holdings in a SIPP but it doesn't state that it levies an admin charge as far as I am aware. If so, it seems quite strange to pay you interest on the one hand and then levy an admin charge on the other.

cloud_dog

Going on what NorthernGeezer found out when speaking with them it appears they do. I have sent a secure message requesting clarification so, I'll update when they confirm.

cloud_dog

So, for anyone interested I can corroborate what NorthernGeezer has previously stated, that cash is treated as part of the 'whole' / investments. Extract from Fidelity response below:

Our service fee is calculated using the total value of your investments including the cash component with Fidelity Personal Investing. The service fees is calculated on the total value of the portfolio and deducted from each account separately.